Changes

1. Suppose the cross elasticity of demand for [[goods]] A and B is +3.8, and for goods X and Y is -2.7. What can you conclude about the relationship of the goods A and B, and of X and Y (i.e., are they substitutes or complements)?

1. Suppose the cross elasticity of demand for [[goods]] A and B is +3.8, and for goods X and Y is -2.7. What can you conclude about the relationship of the goods A and B, and of X and Y (i.e., are they substitutes or complements)?

:The Coase theorem says that transaction costs interfere with efficient levels of activity.  When there are no transaction costs, then the free market attains the optimal use of a resource no matter who owns it. If transaction costs exist, then they impede the ability of people to deal with each other for the optimal result. Government regulations increase transaction costs, and thus are bad for the economy.

:The Coase theorem says that transaction costs interfere with efficient levels of activity.  When there are no transaction costs, then the free market attains the optimal use of a resource no matter who owns it. If transaction costs exist, then they impede the ability of people to deal with each other for the optimal result. Government regulations increase transaction costs, and thus are bad for the economy.

==See Also==

==See also==

http://conservapedia.com/Conservapedia:Index#Economics

http://conservapedia.com/Conservapedia:Index#Economics